Linked List: August 31, 2016

Wednesday, 31 August 2016

Tim Cook on the European Commission’s Tax Ruling 

Tim Cook:

The European Commission has launched an effort to rewrite Apple’s history in Europe, ignore Ireland’s tax laws and upend the international tax system in the process. The opinion issued on August 30th alleges that Ireland gave Apple a special deal on our taxes. This claim has no basis in fact or in law. We never asked for, nor did we receive, any special deals. We now find ourselves in the unusual position of being ordered to retroactively pay additional taxes to a government that says we don’t owe them any more than we’ve already paid.

The Commission’s move is unprecedented and it has serious, wide-reaching implications. It is effectively proposing to replace Irish tax laws with a view of what the Commission thinks the law should have been. This would strike a devastating blow to the sovereignty of EU member states over their own tax matters, and to the principle of certainty of law in Europe. Ireland has said they plan to appeal the Commission’s ruling and Apple will do the same. We are confident that the Commission’s order will be reversed.

I’m with Cook on this one. It’s about what the Commission (and many observers) think the tax law should have been, not what it actually was. It’s telling that Ireland is objecting just as strenuously as Apple.

Also: 13 billion euros isn’t all that much to Apple.

European Commission: ‘Ireland Gave Illegal Tax Benefits to Apple Worth Up to €13 Billion’ 

The European Commission:

Following an in-depth state aid investigation launched in June 2014, the European Commission has concluded that two tax rulings issued by Ireland to Apple have substantially and artificially lowered the tax paid by Apple in Ireland since 1991. The rulings endorsed a way to establish the taxable profits for two Irish incorporated companies of the Apple group (Apple Sales International and Apple Operations Europe), which did not correspond to economic reality: almost all sales profits recorded by the two companies were internally attributed to a “head office”. The Commission’s assessment showed that these “head offices” existed only on paper and could not have generated such profits. These profits allocated to the “head offices” were not subject to tax in any country under specific provisions of the Irish tax law, which are no longer in force. As a result of the allocation method endorsed in the tax rulings, Apple only paid an effective corporate tax rate that declined from 1% in 2003 to 0.005% in 2014 on the profits of Apple Sales International.

Hackers Stole 68 Million Dropbox Passwords in 2012 Attack 

Joseph Cox, reporting for Motherboard:

Hackers have stolen over 60 million account details for online cloud storage platform Dropbox. Although the accounts were stolen during a previously disclosed breach, and Dropbox says it has already forced password resets, it was not known how many users had been affected, and only now is the true extent of the hack coming to light.

Motherboard obtained a selection of files containing email addresses and hashed passwords for the Dropbox users through sources in the database trading community. In all, the four files total in at around 5GB, and contain details on 68,680,741 accounts. The data is legitimate, according to a senior Dropbox employee.

Two things: First, Dropbox is supposedly good at this stuff. If a company that is good at large-scale cloud computing can get hacked and lose 68 million passwords, imagine how hard this stuff is. Second, Dropbox severely underplayed how bad this attack was. That’s shameful.

The Mac: If Not September 7, Then When? 

Jason Snell on what Apple might do if new Mac hardware is imminent but not part of next week’s event.